Apple is readying a smaller version of the iPad in time for the 2012 holiday season, keeping it competitive with Google and Microsoft as they announced their own tablet offerings, a few weeks ago. The newest iPad would feature a screen measuring between seven and eight inches — down from the standard 9.7-inch screen of the previous three versions, Bloomberg reports.

It would not, however, feature the retina display introduced with the most recent iPad in March. Bloomberg cites “two people with knowledge of the plans” in its Tuesday report, and says the new device could be officially announced as early as October.

One analyst told Bloomberg, a smaller iPad launched in time for the holidays would be a punch to the gut for Google and Microsoft — as well as potentially Amazon, whose Kindle Fire has remained a popular (and cheaper) iPad alternative. “

It would be the competitors’ worst nightmare... the ball is in Apple’s court,” said Shaw Wu, an analyst at Sterne Agee & Leach Inc.

We'll keep tabs on Apple and the holiday competition for tablets.

[Mashable]